Vermont Construction Industry Has Fallen

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(Host) Construction jobs in Vermont have fallen sharply over the last year. And an economist for the construction industry does not expect much improvement until next year.

As VPR’s John Dillon reports, Vermont contractors are feeling the pain of the economic downturn.

(Dillon) Ken Simonson is the chief economist for Associated General Contractors of America and his message to Vermont contractors was grim. The state lost 15 percent of its construction jobs from May last year to May 2010.

(Simonson) "Vermont in the last 12 months is actually 49th out of 50 states plus DC. For the U.S. as a whole, we’re all the way back down to the level of August 1996. For Vermont it’s even worse, you haven’t had so few people on construction payrolls since May of 1993."

(Lamberton) "People are in survival mode. And a lot of folks need to get the next job to maintain."

(Dillon) Wayne Lamberton, an electrical contractor from Montpelier, doesn’t need an economist to know that times are tough out there.

(Lamberton) "Our first lay off in 25 years last winter. Tough winter. We have work now, but this winter is hard to predict at this point. We have no backlog. But optimistic at this point that we’ll get enough work to get through the winter."

(Dillon) Lamberton would like state government to stimulate the industry by borrowing money to finance public projects, such as state buildings and schools. He says it’s a good time to put out bids because companies are scrambling for work. He also says that every dollar spent on a construction job has a multiplier effect through the economy.

(Lamberton) "It’s important that we do spend money when we’re getting one and a quarter times the money spent back in wages here in the state. Not to mention that the bids are running 18-20 percent less than they were three years ago. So we’re getting almost one and a half dollars back for every dollar we spend."

(Dillon) Government spending has been one of the few bright spots in the construction industry, according to economist Ken Simonson.

Federal stimulus funds have paid for a host of public works projects, ranging from highways to water treatment plants. But Simonson is concerned that the industry will slump once the stimulus money is spent.

(Simonson) "I’m very worried. I think that we should see private construction gradually picking up from the extremely low levels that we’re having right now, but not enough, I’m afraid, to make up for the absence of the stimulus money once that runs out anywhere from a few months to next year, depending on the category of spending."

(Dillon) Simonson expects total construction spending to rise 3 to 7 percent nationally next year. The situation in Vermont should also improve.

(Simonson) "It depends on how quickly things like university and college construction, hospital construction come back, whether the tourist season is strong this year and into next winter and whether those lead to another new wave of tourist-related construction activity."

(Dillon) The economist says that because Vermont is so small, one major project – a hospital building or a manufacturing plant – can have a dramatic effect on employment and construction spending.

For VPR News, I’m John Dillon in Montpelier.

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